South Korea to release Samsung Scion on parole | Economic news


By KIM TONG-HYUNG, Associated Press

SEOUL, South Korea (AP) – South Korea will release Samsung billionaire Lee Jae-yong on parole this week after spending 18 months in jail for his role in a massive corruption scandal that has sparked protests in the nationwide and led to the ousting of the country’s former president.

The Justice Department’s announcement on Monday, which came with a year remaining on Lee’s 30-month sentence, extends a history of leniency to major white-collar crimes and preferential treatment for convicted tycoons. This tarnishes the reformist image of President Moon Jae-in, who, after winning a by-election in 2017, pledged to curb the excesses of the “chaebol”, the South Korean family conglomerates, and to end the their close ties to government.

Lee, imprisoned since January, heads the Samsung group in his capacity as vice president of Samsung Electronics, one of the world’s largest manufacturers of computer memory chips and smartphones.

He was convicted of bribing then-president Park Geun-hye and her close confidante, who are serving longer prison terms, to gain government support for a 2015 merger between two subsidiaries of Samsung which has tightened its control over the corporate empire.

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Business leaders and key members of Moon’s government and ruling party have endorsed Lee’s early release in recent months, citing Samsung’s crucial role in the domestic economy and the growing challenges it faces on the market. global semiconductor market.

Recent polls have indicated that South Koreans – years away from the angry rallies of 2016 and 2017 – are overwhelmingly in favor of Lee’s release, showing Samsung’s deep influence in a country where it supplies smartphones, televisions and the credit cards people use, the apartments they use. live and hospitals where they are born or will die.

Even with his release on Friday, legal risks still hang over Lee as he faces trial on separate charges of stock price manipulation and audit violations related to the 2015 merger. Lee’s next hearing in this case is scheduled for Thursday in Seoul Central District Court.

In a nationally televised ad, Justice Minister Park Beom-kye said Lee would be released along with around 800 other convicts on Friday morning, ahead of a national holiday celebrating Korea’s liberation from Japanese colonial rule at the end of World War II.

He said the decision to release Lee was based on unspecified concerns related to the “national economic situation and the global economic environment” amid the protracted COVID-19 crisis.

Moon’s office did not immediately comment on Lee’s release and had previously distanced itself from the issue, saying the releases were the responsibility of the Department of Justice. The Blue House said it would be difficult for Moon to grant presidential pardons to former Tory Presidents Park and Lee Myung-bak, who is also in jail for another corruption scandal, before release day on August 15. .

Public support for Lee’s release has made his parole politically convenient for Moon’s government as the liberal seeks support ahead of next March’s presidential election, said Park Sung-min, president of MIN Consulting , a Seoul-based political consultancy firm.

“If you are in politics and realistically think of winning votes, there are five million people in South Korea who own shares of Samsung Electronics, and that’s a group of 10 million if you count the members. of their family, ”Park said.

The Left Justice Party, a minor opposition party, issued a statement criticizing the decision to pardon Lee, which it said confirmed that South Korea was a “Samsung Republic” and that the laws did not made more sense against the “highest 0.01% chaebol”. “

The People Power Party, the main conservative opposition, hailed Lee’s release as a “significant decision” for the economy.

Lee, 53, was originally sentenced in 2017 to five years in prison for corruption, but was released after 11 months in February 2018 following a Seoul High Court ruling that reduced his sentence to 2 years and a half and suspended his sentence, overturning key convictions and reducing the amount of his bribes.

The Supreme Court returned the case to the High Court in 2019, ruling that the amount of Lee’s bribes had been undervalued. Lee was returned to prison in January this year following a retrial.

Samsung Electronics showed no clear signs of business problems as Lee led the company behind bars, communicating its decisions through visiting business executives. Demand for its semiconductor chips, televisions and other products has increased as the pandemic has forced millions to stay in their homes.

The company said last month that its operating profit for the second quarter increased 54% from the previous year to 12.57 trillion won ($ 11 billion), thanks to its double strength in components and finished products.

But there were also concerns that Lee’s jail time could slow Samsung’s speed in major investments as it must spend aggressively to stay competitive in semiconductors and other tech.

While Samsung remains dominant in memory chips, which are used to store information, some believe it is falling further and further behind rival Taiwan Semiconductor Manufacturing Co. in the race for high-tech chips designed to run a market. wider range of functions.

Demand for advanced chips is expected to grow rapidly in the coming years, driven by fifth generation (5G) wireless services, artificial intelligence and self-driving cars. Some analysts say Samsung may be more active in seeking M&A deals to secure such technologies once Lee exits and can more easily sign the investments.

Park Sang-in, professor of public enterprise policy at Seoul National University, was more skeptical, saying Lee has yet to prove his competitiveness as a business leader since taking over from his position. father, who died last year after years of hospitalization following a traffic accident in 2014. heart attack. Park described Lee’s forgiveness as a setback for South Korean democracy, saying it shows the rule of law does not apply to the richest and most powerful people.

“I don’t think Lee’s return to the office will make a big difference,” Park said. “Lee didn’t prove himself like Steve Jobs or even Lee Byung-chull,” he added, referring to Lee’s grandfather who founded the group.

Copyright 2021 The Associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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